Prosecutors investigating GM’s legal team for withholding information from regulators

As a government probe into General Motors (GM) continues, federal prosecutors are wondering who in the company had knowledge of the faulty ignition problems that required the recall of millions of vehicles. And now, even the company’s legal department is feeling the heat.

According to sources speaking with the Wall Street Journal, federal prosecutors are investigating GM’s legal team, hoping to determine whether anyone inside the department concealed information from regulators concerning the faulty switches. Prosecutors believe that attorneys with the knowledge of the situation may have delayed a recall through their actions.

The legal department is just one of many departments feeling the recall pressure, but it’s also one that has received notoriety. In June, the New York Times reported that GM lawyers “kept their knowledge of fatal accidents related to a defective ignition switch from their own boss, the company’s general counsel, Michael P. Millikin.”

In addition, three lawyers were among the 15 GM employees fired as a result of an internal investigation. One of those lawyers was William Kemp, who led GM’s legal strategy and internal investigations for more than two years on the defective ignition switch.

But regardless of what happens with the GM general counsel position, the fact that prosecutors are looking at the legal department should be a wake-up call to in-house counsel. In the July edition of InsideCounsel magazine, Richard Levick, the CEO of crisis communications and high-stakes PR firm LEVICK, says that general counsel can’t have both high responsibility and anonymity.

“In any event, perhaps a truth of the GM situation, irrespective of how it resolves, is that GCs can't have it both ways,” Levick says. “If they want the newfound authority and enterprise-wide profile toward which their professional roles are trending, they must recognize that they cannot then recede into the shadows once—fairly or not—the glare of an unfriendly spotlight enfolds them.”